Three Leading AI Stocks Ready to Shape the Quantum Computing Future
Key Insights: In recent months, quantum computing has emerged as a captivating yet speculative prospect for investors. While Nvidia CEO Jensen Huang indicates that commercial quantum computing may still be years away, major tech companies are devoting substantial resources to this field. They view quantum computing as a potentially lucrative service to incorporate into existing AI ecosystems.
Investors are flocking to quantum computing, which could be the next pivotal idea powering the broader AI revolution.
If you’re looking to invest in quantum computing, you might already be aware of popular names like IonQ, Rigetti Computing, or D-Wave Quantum. These companies may present significant opportunities, but timing is critical for smaller, more speculative players.
For those who want exposure to quantum computing within a wider AI portfolio but also prefer to limit risk, consider the so-called “Magnificent Seven.” Out of this group, Amazon, Microsoft, and Alphabet stand out as prime picks in the race to drive quantum computing forward.
Quantum computing investment is more challenging than it might seem. The price movements of IonQ, D-Wave Quantum, and Rigetti Computing over the past six months illustrate both gains and periods of selling. Despite recent pullbacks, these small-cap names are still trading well above their levels just half a year ago.
Some investors profited substantially, but many who chased momentum ended up with losses. Because IonQ, D-Wave, and Rigetti generate minimal revenue and will likely need additional funding, it’s doubtful their stocks will repeat such swift rallies. Returns from highly speculative positions often hinge on luck.
Furthermore, Nvidia CEO Jensen Huang recently stated that practical quantum computing solutions may be two decades away. Given that timeline, investing in a smaller, low-revenue enterprise lacking a clear path to profitability could be risky.
Instead, investors could focus on established, well-rounded businesses that already produce consistent cash flow and have the resources to fund emerging technologies like quantum computing.
1. Amazon
Traditional computing relies on binary codes called classical bits (zeros and ones). Quantum computing also uses zeros and ones, but through qubits, which can be in multiple states at once. The theory is that qubits could solve complex challenges significantly faster than today’s best supercomputers. However, qubits are highly sensitive to heat and vibrations, making error correction expensive. Amazon’s new Ocelot chip aims to cut quantum error correction costs by as much as 90% by weaving error correction directly into its quantum architecture. By developing fault-tolerant systems, Amazon believes Ocelot can substantially lower the cost of quantum computing versus conventional methods. Crucially, Amazon can integrate this service into its profitable Amazon Web Services (AWS) platform, where it could stimulate cloud demand and potentially amplify profit margins as quantum computing matures.
2. Microsoft
Microsoft’s Majorana 1 quantum chip utilizes a topological qubit framework, offering greater scalability and stability than standard qubits, which are easily disrupted by external forces. The company describes its topoconductor as a quantum processing unit (QPU) meant to reach one million qubits on a single chip. While Majorana 1 remains in its prototype phase, owning Microsoft shares could provide exposure to the potential upswing of quantum computing.
3. Alphabet
Google Quantum recently introduced the Willow quantum chip, which tackled a benchmark task in roughly five minutes—work that would take a powerful classical supercomputer an estimated 10 septillion years. Although the “random circuit sampling” test showcased Willow’s capabilities, practical quantum applications remain some time away. Nevertheless, Alphabet’s advancements indicate that future AI demands may surpass modern GPU limits, especially in areas like medical research, finance, and cryptography. Willow’s performance supports the view that Alphabet could become a key player in quantum computing.
In the long term, Amazon, Alphabet, and Microsoft each benefit from diverse businesses spanning e-commerce, cloud computing, streaming, gaming, software, social media, advertising, and consumer devices. Their dedication to AI can boost revenue growth and bolster profit margins over time. Quantum computing, still primarily a theoretical element of the AI story, is an added dimension that may eventually be integrated into all three companies’ product lines, positioning them as long-term frontrunners in the AI landscape.
Source: https://www.fool.com/investing/2025/03/18/3-magnificent-artificial-intelligence-ai-stocks-se/